Politics force growth back on to Europe's agenda
Written by Philip Whyte, 25 April 2012
But Philip Whyte, a senior research fellow at the CER, is skeptical that the eurozone can regain the path of growth unless it corrects what he sees as fatal flaws in the design of the single currency. In the absence of a fiscal union similar to that in the United States, heavily indebted eurozone members such as Spain and Italy are vulnerable to sudden stops in private-sector capital flows, robbing them of policy autonomy, Whyte argued. "The eurozone would still be working as an austerity machine without the fiscal compact because flaws in the structure force countries to pursue self-defeating economic policies," he said.